Draper Esprit — Strong H122, FY22 guidance revised upwards

Molten Ventures (LSE: GROW)

Last close As at 22/02/2024

GBP2.34

−4.00 (−1.68%)

Market capitalisation

GBP409m

More on this equity

Research: Financials

Draper Esprit — Strong H122, FY22 guidance revised upwards

Draper Esprit’s management confirmed that H122 NAV per share is expected to be not less than 885p (31 March 2021: 743p), growth of 19% in the period. With portfolio activity remaining strong, management revised its FY22 fair value growth guidance from 15% at the start of the year to c 35% ‘subject to wider market conditions’. Although growth in NAV per share lags fair value growth (H122 estimates: 26% fair value growth, 19% NAV per share growth), 35% fair value growth might suggest an NAV per share of c 930–950p for 31 March 2022, close to where the share price has been trading recently. Management also confirmed an imminent rebranding, including a change of name ‘to better reflect [the group’s] strategy in its latest phase of growth’. Draper Esprit’s H122 results are due on 29 November 2021.

Analyst avatar placeholder

Written by

Financials

Draper Esprit

Strong H122, FY22 guidance revised upwards

H122 trading update

Listed venture capital

5 November 2021

Price

1,042p

Market cap

£1.59bn

Net cash (£m) at 30 September 2021

156

Shares in issue

153.0m

Free float

93%

Code

GROW

Primary exchange

LSE

Secondary exchange

Euronext Dublin

Share price performance

Business description

Draper Esprit is a London-based venture capital firm that invests in the European technology sector. It has a portfolio of c 70 investee companies and includes a range of funds (seed, EIS and VCT) within the group, as well as its flagship balance sheet VC fund.

Analysts

Richard Williamson

+44 (0)20 3077 5700

Dan Ridsdale

+44 (0)20 3077 5700

Draper Esprit is a research client of Edison Investment Research Limited

Draper Esprit’s management confirmed that H122 NAV per share is expected to be not less than 885p (31 March 2021: 743p), growth of 19% in the period. With portfolio activity remaining strong, management revised its FY22 fair value growth guidance from 15% at the start of the year to c 35% ‘subject to wider market conditions’. Although growth in NAV per share lags fair value growth (H122 estimates: 26% fair value growth, 19% NAV per share growth), 35% fair value growth might suggest an NAV per share of c 930–950p for 31 March 2022, close to where the share price has been trading recently. Management also confirmed an imminent rebranding, including a change of name ‘to better reflect [the group’s] strategy in its latest phase of growth’. Draper Esprit’s H122 results are due on 29 November 2021.

Period
end

Plc cash*
(£m)

Gross portfolio value (£m)

NAV
(£m)

NAV/share
(p)

P/NAV
(x)

03/20

34.1

702.9

659.6

555

1.88

09/20

62.1

702.4

714.7

600

1.74

03/21

160.7

983.8

1,033.1

743

1.40

09/21**

156

1,345

1,354

885

1.18

Note: *Includes restricted cash but not funds held on behalf of EIS/VCT investors. **Provisional unaudited H122 interim figures.

With continuing strong market conditions, the positive momentum Draper Esprit saw in H221 continued into H122. Draper Esprit’s H122 performance was driven by substantial contributions from Revolut (Series E) and Trustpilot’s post-IPO performance, as well as new financing (up) rounds at Aircall (Series D), Ledger (Series C), Form3 (Series C), N26 (Series E), Aiven (Series C) and public market contributions from Cazoo (NYSE SPAC) and UiPath (NYSE).

In terms of cash, the group invested £165m from its balance sheet in H122, tracking well-ahead of management’s guidance for the year of c £200m. Total investment in H122 reached £169m (H121: £50m), including £4m of EIS and VCT co-investment. Balance sheet cash (including restricted cash) at 30 September 2021 stood at £156m (31 March 2021: £161m), reflecting cash realisations of £67m (H121: £106m) and £108m of net proceeds from the June 2021 placing.

During the period, Draper Esprit also completed a move to the premium listing segment of the Official List and joined the FTSE 250 Index.

General disclaimer and copyright

This report has been commissioned by Draper EspritDraper Esprit and prepared and issued by Edison, in consideration of a fee payable by Draper Esprit. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services. We never take payment in stock, options or warrants for any of our services. The research analyst primarily responsible for the preparation of this report personally holds an equity position in the company of less than 1%.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2021 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

                      

More on Molten Ventures

View All

Latest from the Financials sector

View All Financials content

Research: TMT

Arcane Crypto — Bitcoin mining project has come on stream

Arcane Crypto has successfully launched its bitcoin (BTC) mining operations (powered by renewable energy) in October after the delivery of the first batch of mining equipment (the second batch is due to be shipped in January 2022). As a result, management expects the group will become cash-flow positive from Q122. The company has also launched the first iteration of its unified tech platform (aimed at becoming the ‘one-stop-shop’ for several products offered by the Arcane Crypto group). Meanwhile, its Q321 results reflect the more muted activity in digital asset markets during the quarter after the sell-off in May.

Continue Reading

Subscribe to Edison

Get access to the very latest content matched to your personal investment style.

Sign up for free